The agency’s oversight of credit union service organizations (CUSOs) and other third-party providers is one of four areas currently under audit by the agency’s inspector general’s office and noted in the IG’s last semiannual report to Congress.
The report, covering activity from Oct. 1, 2019, through March 31, 2020, is the most recent provided to Congress by the National Credit Union Administration’s (NCUA) Office of Inspector General (OIG).
Among the highlights:
- December 2021 remains the NCUA’s target for implementing the “S” (for sensitivity to market sensitivity) element of its credit union rating system (CAMEL, currently focusing on capital adequacy, asset quality, management, earnings, and liquidity). This OIG recommendation was made in 2015 in a report reviewing the agency’s interest rate risk program. In addition to adding an S to CAMEL, the OIG recommended revising the L component to include only liquidity content and criteria; this recommendation also remains open.
- Four audits are currently under way, focusing on the agency’s consumer complaint program; NCUA’s examination process and oversight authority of CUSOs and other (non-CUSO) third-party vendors; the agency’s handling of personally identifiable information at liquidated credit unions; and its governance of information technology (IT) initiatives.
- The only material loss review was for the failed C B S Employees Federal Credit Union, which cost the National Credit Union Share Insurance Fund some $39.5 million. “Given the the economic impact of the COVID-19 [coronavirus] pandemic, we anticipate an increase in required MLRs in the coming year,” according to the report’s introductory message.
The report also notes that the OIG, amid the pandemic, has transitioned to working remotely with few issues.
NCUA OIG Semiannual Report to Congress (Oct. 1, 2019, to March 31, 2020)